General Dynamics upgraded after stock slump

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A Citi Investment Research analyst upgraded aviation and military equipment company General Dynamics, saying its shares have fallen below fair value.

General Dynamics shares have dropped about 17 percent since hitting a 12-month high on April 26. The Standard & Poor's 500 has fallen about 13 percent since then, with the debt crisis in Europe rattling investors.

For the year, analyst Itay Michaeli said General Dynamics shares have done worse than shares of other aerospace and defense companies he covers by an average of 10.8 percent.

He left his earnings estimates and $67 target price unchanged, but raised his rating on the company to "hold" from "sell."

Shares in General Dynamics Corp. slipped 53 cents to $65.43 in afternoon trading as broader markets tumbled. The Dow Jones industrial average fell around 200 points.